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BRITISH VIRGIN ISLANDS Jurisdic Onal Guide

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BRITISH VIRGIN ISLANDS Jurisdic Onal Guide BRITISH VIRGIN ISLANDS Jurisdic�onal Guide GENERAL INFORMATION The Bri�sh Virgin Islands (BVI) comprises of 50 islands in the Caribbean Sea, located approximately 96 km east of Puerto Rico, north of the Leeward Islands, and adjacent to the US Virgin Islands. Its principal Islands are Tortola, Virgin Gorda, Anegada and Jost Van Dyke, spanning a total area of 153 sq.km. The capital is Road Town, Tortola. The BVI is an economically and poli�cally stable non-sovereign, Bri�sh Overseas Territory with its legal system being based on English Common Law. The BVI’s economy is dependent mainly on tourism and financial services, with the la�er being the largest contributor to its GDP. The BVI is the world’s largest offshore corporate domicile with close to 500,000 ac�ve companies. It is also the world’s second-largest offshore investment funds domicile, with close to 3,000 ac�ve investment funds. BVI Business Companies (BCs) are very popular and widely used offshore vehicles because of their administra�ve ease, flexibility, taxa�on exempt status and the fact that they are widely accepted and understood by the interna�onal financial community. The BVI regime offers no controls on the import and export of currency, capital or profits, even though those are subject to An�-Money Laundering laws and regula�ons. There are no taxes on profits or dividends, nor is there any capital gains tax, income tax, capital transfer or estate tax. BVI also boasts one of the largest yach�ng industries in the Caribbean featuring over 20 yacht harbours and marinas, including an exclusive mega-yacht marina and several annual mega-yacht rega�as. COUNTRY INFORMATION Popula�on 30,000 Loca�on Caribbean Sea Language English Time zone 4 hours behind GMT Currency US Dollar ($) Chelco Management Services Ltd 221, Chr. Chatzipavlou Str., Helios Court, 1st Floor, 3036 Limassol, Cyprus | P.O. Box 51625, 3507 Limassol, Cyprus T: +357 25 873000 | F: +357 25 373200 | E: [email protected] | www.chelcomanagement.com CORPORATE INFORMATION Basic Characteristics Legal Form Business Company (BC) Common Law, based on English Common Law with local modifications Legislation and local statutes Regulatory Authority BVI Financial Services Commission (FSC) • Companies limited by shares • Companies limited by guarantee not authorised to issue shares • Companies limited by guarantee authorised to issue shares Types of Companies • Unlimited companies authorised to issue shares • Unlimited companies not authorised to issue shares • Restricted purposes companies (or SPVs) • Segregated portfolio companies (or SPCs) Certified identification is required for beneficial owners and senior Due Diligence officers COMPANY INFORMATION Company Name Latin Alphabet The use of foreign character names is permitted in appropriate Language circumstances and should be accompanied by a translation to ensure that the name is not restricted. Limited, Unlimited, (SPV) Limited, Corporation, Incorporated, Société Name Endings Anonyme, Sociedad Anonima or the abbreviation "Ltd", "Corp", "Inc" or "S.A." Any name that is identical or similar to an existing company name, or any name that suggests the patronage of the Royal Family or the Name Restrictions Government of the BVI (around 217 words and phrases have restricted use in the BVI) Bank, building society, savings, loans, insurance, assurance, Names Requiring reinsurance, fund management, investment fund, trust, trustees Consent or License Chamber of Commerce, university, municipal or their foreign language equivalents Authorised Shares Standard Currency US$ Permitted Currencies Any Minimum Share Issue One Registered shares, shares of no par value, preference shares, Classes of Shares redeemable shares and shares with or without voting rights, bearer Permitted shares* BRITISH VIRGIN ISLANDS PAGE 2 Allowed • Expressly authorised by the company’s memorandum • All bearer share certificates are required to be deposited with Bearer Shares* Authorized or Recognized Custodians • Annual government license fees for companies with bearer shares are set to US$1,100 per year Directors Minimum Number One (physical or legal) Register of Directors Yes Local Director Required No Publicly Accessible No Records Location of Meetings Anywhere Alternate Directors Yes (allowed to sign written resolutions) Shareholders Minimum Number One (physical or legal) Local Required No Publicly Accessible No Records Location of Meetings Anywhere Secretary Required Optional (Physical or legal. Any nationality) Local Requirements Registered Office/ Yes Agent Accounts Yes • Reliable accounting records for a minimum of 5 years sufficient information to explain the company’s transactions and determine Required to Prepare the financial position of the company with reasonable accuracy • The Registered Agent must maintain a written record of the physical address where the accounting records are maintained for each company Audit Required No Required to File No Accounts Publicly Accessible No Accounts BRITISH VIRGIN ISLANDS PAGE 3 Recurring Government Costs Scaled annual government license fees Annual Tax/ License • Up to 50,000 authorized shares = US$350 Fee • Over 50,000 authorized shares = US$1,100 Taxation Nil • Dividends, interest, rent, royalties, compensation and/or other Income Tax / Profit amounts paid by the company • Capital Gains realized with respect to any shares or debt obligations of the company Nil Stamp Duties on Except where an instrument relates to the transfer of an interest in Transactions land in the BVI or a transfer of securities of a company owning land in the BVI BVI Trusts General Trust refers to the legal relationship created by a settlor when assets have been placed under the control of a trustee for the benefit of a beneficiary or for a special purpose. Trusts in the BVI are governed by the Trustee as updated by the Trustee (Amendment) Acts of 1993, 2003 and 2013. Other significant statutes relating to trusts and trustee services in the BVI are the Virgin Islands Special Trusts Act, 2003 (VISTA), the Banks and Trust Companies Act, 1990 and the Financial Services (Exemptions) Regulations, 2007. BVI trusts achieve a variety of estate, personal, financial, tax or other business planning objectives. They can be used for tax purposes, as an instrument of estate planning, for asset protection and more and enjoy complete confidentiality. A BVI Trust may be formed by declaration (a deed signed only by the trustee) or by settlement (a deed signed by both the trustee and the settlor). There is a fee of US$200 levied at the time of creation. There are no local taxes on BVI trusts and most BVI trusts now carry a perpetuity period of 360 years. Types of BVI Trusts BVI Trusts include Discretionary Trusts, Purpose Trusts, Private Trust Companies (PTCs), Charitable Trusts and VISTA Trusts. A VISTA trust is a trust of shares of a BVI Business Company under the terms of which the trustee is disengaged from management responsibility. It is governed by the Virgin Islands Special Trusts Act “VISTA”, as amended in May 2013, which removes the application of the ‘prudent man of business’ rule upon the trustees of the Trust. A VISTA trust allows the company to be run by its directors, and limits the VISTA Trusts intervention of the trustee to the resolution of specified issues. It essentially allows the directors, which may include the owner (settlor), to retain effective management and control of the company even after the owner had divested himself of its ownership. The rationale behind it is that the duty of prudence that is traditionally imposed on trustees may be incompatible with a settlor who believes that risk taking is an integral part of business practice. BRITISH VIRGIN ISLANDS PAGE 4 BVI Investment Funds General The primary legislation which regulates the BVI Investment Funds industry is the Securities and Investment Business Act, 2010 (SIBA). SIBA regulates both funds and fund functionaries operating in or via the BVI. Under SIBA, the term “mutual fund” or “fund” is used to refer to what are commonly known as open-ended funds or hedge funds. The latter make up approximately one quarter of all offshore hedge funds established worldwide. BVI Investment Funds feature no regulatory restrictions on investment policies or strategies or on performance and other fee arrangements and do not require the appointment of local directors or local functionaries including auditors. They also feature low start-up and ongoing fees and costs. BVI Funds are categorized in Private Funds, Professional Funds and Public Funds. October 2014 NOTE: The information contained in this publication is accurate as at the date of its publication and is not intended to be exhaustive nor a substitute for proper professional advice. Please contact our company for consultation. We look forward to assessing your individual business plans and requirements and recommending the right solution for your unique needs. BRITISH VIRGIN ISLANDS PAGE 5 .
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